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Key findings

Tender price resilience: The final quarter of 2016 saw a rebound in construction sector confidence, driving levels of positive sentiment back almost to their pre-referendum mark. 44 percent of UK contractors surveyed by Turner & Townsend said they expected market conditions to improve during 2017.

Caution eases, even if uncertainty does not: The easing of investor caution in Q4 2016 was mirrored by a greater willingness among contractors to commit to new work. Despite ongoing uncertainty, tender price forecasts remain firmly in the positive territory.

A tale of two hotspots: Tender price inflation is expected to be particularly strong in London and Manchester moving forward. However, while the London market remains a hot one, tender price expectations in the capital and the North West are moving in opposite directions.

Manchester moves from strength to strength: High volumes of work in Manchester are stretching the supply chain’s capacity, driving up prices and reducing levels of competition on tenders. What does the future hold for tendering conditions, investment and appointing contractors?